The president’s proposal to cap itemized deductions on high-income tax returns at 28 percent to help pay for his $447 billion jobs package has charities asking the administration to give them a break.

The American Jobs Act’s limitation on deductions, including those for charitable contributions, has nonprofits worried it could likewise limit the willingness of private donors to give.

“We’re very much for jobs,” said Denver Rescue Mission president and chief executive Brad Meuli. “The people who leave us free of alcohol and drugs are looking for jobs, but taking money from charities doesn’t help the poor get jobs. We’re very worried about this provision.”

Nonprofits estimate losses

The Colorado Springs-based Association of Gospel Rescue Missions, the country’s largest network of independent crisis and rehabilitation centers, is urging politicians to avoid provisions in job legislation that would reduce resources for the poor and homeless.

“The president and Congress should be encouraging more giving to charities that help the poor, not discouraging private donors,” association president John Ashmen said.

The association asks the federal government to find ways to create jobs and strengthen support for Americans’ generosity.

There is no way to measure what effect the provision would have on nonprofits, Ashmen said, but as needs have increased, it has become harder than ever to raise money. The U.S. Census Bureau reported last week that the number of Americans living in poverty increased last year to 46.2 million, or almost one in six people.

The Independent Sector, a nonprofit, nonpartisan coalition of 600 charities, foundations and corporate philanthropy programs, reports that a 28 percent cap could cost charities as much as $7 billion a year in contributions.

The coalition, with support from Catholic Charities, the American Red Cross and the American Association of Museums, among many others, is urging the president and Congress to pay for the jobs package without limiting the charitable deduction.

Administration defends act

White House officials argue that high-income earners will continue to receive a tax benefit when they give to nonprofits, but the wealthiest Americans will receive a 28 percent deduction, instead of a 35 percent deduction. And that’s more in line, they say, with what other income brackets receive. Middle-income donors will continue to get a 15 percent deduction.

The 28 percent cap on itemized tax deductions applies to individual taxpayers with adjusted gross incomes of $200,000 or more and to married couples filing jointly with $250,000 or more.

Focus on the Family’s senior vice president of government and public policy, Tom Minnery, said the Colorado Spring-based family counseling ministry is not surprised the government would want to take more of the money that otherwise would go to charities because the Obama administration believes government is the answer to everything.

“The good news is that the bill is going nowhere,” Minnery said, “so we’re not too worried about it.”

More in News

The Denver Art Museum plans to funnel a $25 million one-time gift into the estimated $150 million budget for renovating its iconic North Building in time for the structure’s 50th anniversary in 2021, officials announced Thursday.

President-elect Donald Trump is expected to name fast-food executive Andrew Puzder, a vocal critic of substantially increasing the minimum wage and an opponent of rules that would make more workers eligible for overtime pay, as head of the Labor Department.